Finance Essay

1750 WordsNov 29, 20137 Pages
Comparison of the Characteristics of Small Businesses with Large Businesses Small Businesses are generally defined as privately-held businesses that are small relative to other firms in the industry and operated by an owner-manager. The Small Business Administration’s (SBA) general definition of a small business is one that  does not dominate the industry  is owned by a few individuals  meets the SBA Size Standards by Industry The Size Standards are set according to NAICS codes and based on either revenues or number of employees. The following table provides general guidelines for broad classes of industries: Revenues Number of Industry (Millions) Employees Agriculture $0.75 – $12.5 Mining/Oil & Gas $7.0 500 Construction $7.0 – $33.5 Manufacturing 500 – 1,500 Wholesalers 100 Retail Trade $7.0 – $29.0 Transportation $7.0 – $25.5 500 – 1,500 Information $7.0 – $29.5 500 – 1,500 Finance $7.0 Real Estate $7.0 – $25.5 Professional $7.0 – $25.0 500 – 1,500 Health Care $7.0 – $34.5 Entertainment/Food Services $7.0 Other Services $7.0 Many small businesses tend to have local or regional operations and the owners typically have personal exposure to the creditors of the business through personal guarantees that are often required as collateral for loans. Large Businesses are defined as publicly-held businesses in which management and owners are different and which tend to dominate an industry. These firms have access to the capital markets and generally have national or international operations. Management of the Small Business  The owner of business is usually the decision-maker  There is no outside board of directors  Generally limited in ability to hire professional management and must

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